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17. World Bank Resettlement Program Displaces Millions

Source: WORLD RIVERS REVIEW, December 1998, Title: “World Bank’s Record on Resettlement Remains Troublesome,” Author: Lori Pottinger

Faculty Evaluator: Bryan Baker, Ph.D.
Student Researchers: Jennifer Mathis, Melissa Bonham, & Lisa Desmond

The World Bank funds large dam projects, but does little to help the displaced millions who are forced to relocate. A recent report by the World Bank’s Operations Evaluation Department (OED), which reviews the Bank’s record on complying with its own directives, paints a gloomy picture of the Bank’s resettlement record for the people displaced by these large dam projects in the name of development. The most recent data available indicate that 1.9 million people are being displaced by projects in the Bank’s current portfolio and that these numbers continue to grow.

The report, “Recent Experience with Involuntary Resettlement,” published in June 1998, provides a detailed analysis of the resettlement record of eight dam projects approved between 1984-91 in six countries. To date, the World Bank has helped finance more than 600 large dams.

The OED report acknowledges major problems with the Bank’s resettlement record. Their biggest concern is over the Bank’s ability to restore the incomes of those resettled. The authors of the report state that the Bank showed only “intermittent interest” in providing follow-through to support its resettlement programs once a loan was disbursed. Another problem stems from The Bank’s typical practice of gearing compensation disbursements to a project’s construction schedule. This practice results in the Bank exiting the project before staff can reach the Bank’s primary responsibility—restoring or improving incomes and standards of living for the displaced populations.

The report recommends that the Bank move away from its policy of offering replacement land for lands lost to a project. Big dam sites usually eliminate the only productive farming systems in the region, leaving resettlers with barren land. People indigenous to these valleys have few skills that are transferable to activities other than farming. They become displaced and unemployable in a foreign environment. Alternatives to land-for-land compensation such as cash compensations or so-called income generating schemes have been tried for years. Several investigations by the World Bank Inspection Panel demonstrate that, at least in rural settings, such options have universally failed. Even the OED report confirms that the Bank’s special income strategies have been uniformly ineffective. Still, they are recommending that the Bank weaken its compensation policy by de-emphasizing the current practice of offering replacement land to displaced farmers. One of the OED report authors has said, “In reality, resettlers lose the best land in the area, river valley land, and it’s replaced with the most awful land around, because that is what is left.”

AUTHOR UPDATE BY LORI POTTINGER: An estimated 40 to 60 million people have been displaced by large dams in this century, most of them rural poor. The great majority of those displaced have been further impoverished and abandoned by the dam builders and governments responsible for their plight. The World Bank has been a major force behind the world’s rush to dam its rivers, and Bank projects as a whole continue to displace nearly 500,000 people a year. The Bank’s resettlement policies have long been considered the “gold standard” that forcibly moves people for development schemes. Yet the Bank has failed at resettling people effectively, and instead has increased poverty the world over.

Since the original story was published, the World Bank began to rewrite its resettlement policies, but many non-governmental organizations (NGOs) have criticized the document thus far as far weaker than previous ones, especially on issues of restoring incomes and “land-for-land” compensation. Many NGOs question the entire idea of a policy on forced resettlement. Says Patrick McCully of International Rivers Network (IRN), “[The draft policy] insures that the only people certain to be better off due to Bank-funded involuntary resettlement will be resettlement consultants.” IRN and other NGOs propose that the Bank no longer engage in forcible resettlement, which the U.N. Commission on Human Rights calls “a gross violation of human rights,” but instead approve projects only after potentially affected people have freely given their consent. “Bank-financed resettlement should be voluntary and based on negotiated settlements with affected people to which project developers can be held accountable. If forced resettlement continues to be normal practice for the Bank, project-affected people and their allies will continue to mobilize against Bank projects,” McCully writes in a letter to the Bank.

Even if the Bank were to adopt a stronger resettlement policy, it would still have to rectify problems from past projects. Dam-affected people have increasingly demanded reparations for their losses. One recent example is ongoing protest over Thailand’s Pak Mun Dam, one of the few projects described as a success in the World Bank’s OED report (the topic of the original story). At press time, 3,000 villagers had occupied the dam site for nearly a year, demanding the dam be removed if the World Bank can’t make good on its promises to restore livelihoods. “The OED report did not tell the truth,” said a Pak Mun villager, in a new report on the project by International Rivers Network. Villagers are asking Bank staff to come see for themselves how their lives and livelihoods have deteriorated.

Neither the original story about the OED’s evaluation of the Bank’s resettlement practices nor the ongoing revision of the Bank’s resettlement policies have received significant media coverage.

Tel: (510) 848 1155 Fax: (510) 848 1008 Web site:

About the World Bank’s role in forcible resettlement worldwide:

Bank Information Center
733 15th Street NW, Suite 1126 Washington, DC 20005
Tel: (202) 624-0623
Web site:

Center for International Environmental Law
1367 Connecticut Avenue NW, Suite #300
Washington, DC 20036 Tel: (202) 785-8700 E-mail: Web site:

FOR MORE INFORMATION: About dams worldwide: Lori Pottinger, Director, Southern Africa Program and Editor, World Rivers Review International Rivers Network, 1847 Berkeley Way Berkeley, California 94703 USA

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